How To Choose A Profitable Forex Signal Service?

Published: 25th June 2012
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Among the most popular approaches to trading currency is by following "signals". If you've heard the term "Forex Signals" but desired to find out more about its advantages and disadvantages, or if it's right for you or not, please read on.

Exactly what is a signal service?

A Signal Service provides alerts on trading opportunities. For example, a pro trader sits at his desk, trading his account. Whenever the trader enters the market, he also sends an alert to his subscribers, offering them the opportunity to enter the same trades as him. Some services also provide an automated robot called a trade copier. This robot will execute the same trades directly on the client's account, so clients have no need to actually go to their computer and execute the signals manually.

Why should I use a signal service?

Regardless if you are a new or experienced trader, there are signal services out there that will contribute to your profits or set you on the correct track to trading success.

For newbies desiring to discover the right way to currency trade, a forex signal service can be used as a superb learning tool when demo trading. As with any other profession, you simply won't see success over night, despite what some brokers might want you to believe. So, on your first steps in this exciting but dangerous world, experienced traders will assist you to learn the way real professionals trade. Plus, you have a chance to copy the trades of a pro into your own account, so you start trading on the right foot.

A signal service is also suitable for people that do not have the time to sit all day in front of the computer, searching for trades. Being subscribed to a signal service means there's a pro trader sitting and looking for trades on your behalf. This saves considerable time and headaches, plus needless to say the results should be better, as you're having a highly experienced professional working for you.

For veteran traders, it's a real opportunity to hone your skills, and provide an additional source of profitable trades to diversify your "portfolio" of strategies.

What are the disadvantages and problems with signal services?

Below are the disadvantages and common issues with signal services, which require your attention and caution.

There are some brokers that will offer you free signals. You should ask yourself why would someone offer free signals if they are serious and profitable. The answer in most cases is that they have a hidden motive - to push you to trade more. The more signals they send you, the more trades you will make, and the more commissions they earn. That's why their main interested is sending as many signals as possible, not as good and profitable signals as possible. A majority of these freebie signals have made a bad name for the world of signals, but luckily there are a few rare paid signals providers who do a good job.

Time constraints is also a primary reason to consider a reputable signal service. To obtain the best returns it's certainly optimum to be near a computer most of the day, so that you can immediately enter the market whenever you get a signal. However, this matter has been overcome by using what's called a "Trade Copier", which is an automated robot that receives its trading commands straight from the signals service trader.

Good signals originate from good traders. Unfortunately, the Forex industry is filled with scams and dishonest vendors. Calling yourself a trader and providing signals is not hard, but providing signals which actually make a profit is of course another story. The statistics are that 95% of traders lose money in Forex. This is applicable to signal providers as well. So, your mission is to find one of those 5% of signal providers who actually make profit in Forex.

Good Trading!


Jim Gilberti - Dir. Client Relations is powered by Axis Financial Source, Ltd.
Best ways to weed through the many forex signal options to find the illusive 5% of the signal services that make money.

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